The Left party wants more owner-occupied homes: Housing economist calls one of the proposals unrealistic.

There needs to be more owner-occupied homes in Denmark, especially in the larger cities.

That’s the message from Venstre’s leader, Troels Lund Poulsen, following the debate on housing taxation, which has sparked political tensions.

"There simply aren’t enough owner-occupied homes in the major cities. The supply isn’t large enough, so we need to do more to create additional owner-occupied housing," says Troels Lund Poulsen.

He argues that many Danes dream of owning their own home, but the opportunities are far too limited today. This problem is particularly pronounced in and around the larger cities, where prices are high.

To lower prices, supply must increase. In short, more owner-occupied homes need to be built in these areas.

"Municipalities should have the option to require that 50 percent of newly built homes be owner-occupied. Currently, that figure is 25 percent," he states.

Additionally, he points out that attics in larger cities should be allowed to be converted into homes. The same applies to retail and commercial spaces, which should be easier to transform into residential properties.

What about those who cannot afford to buy an owner-occupied home? How does this address the issue that the housing market is only accessible to the wealthy?

"It’s not as if I’m saying everyone must own a home. There will still be a mixed housing stock in the larger cities—there will still be cooperative apartments and rental homes. But I believe we need to focus more on giving people the opportunity to own their homes," says Troels Lund Poulsen.

Read also: Løkke sends a lifeline to the Conservatives amid housing tax dispute (https://www.dr.dk/nyheder/politik/loekke-sender-en-stikpille-til-de-konservative-midt-i-boligskatte-strid)

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Unrealistic in Copenhagen

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Currently, 48 percent of Denmark’s housing stock consists of owner-occupied homes. Venstre’s proposal to create even more across the country is not unrealistic, according to Curt Liliegreen, director of the Boligøkonomisk Videncenter (Housing Economics Research Centre).

However, the situation is different in the capital, where the dream of homeownership is most difficult to achieve.

"In Copenhagen, it’s not realistic to expect owner-occupied homes to dominate. Only 20 percent of owner-occupied homes are those where the owner lives in the property itself. Cooperative apartments, on the other hand, make up 30 percent," he says.

Curt Liliegreen, director of the independent Boligøkonomisk Videncenter, supports some of the proposals but not all. (Archive photo) (Photo: © Thomas Lekfeldt, Ritzau Scanpix)

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Less attractive to build and sell new owner-occupied homes

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The requirement that a certain share of homes in new developments be owner-occupied is not entirely without problems, he says.

This is partly because new owner-occupied homes struggle to compete on price with existing ones. One reason is VAT regulations, which make selling a newly built home subject to tax. Consequently, investors are less inclined to build new owner-occupied homes, he explains.

Read also: Løkke clarifies: This is how he plans to change housing tax (https://www.dr.dk/nyheder/politik/loekke-uddyber-saadan-vil-han-aendre-boligskatten)

"I don’t think the proposal to require 50 percent owner-occupied homes will have any effect, because investors aren’t ready to build that many," says Curt Liliegreen.

More sensible, according to the housing economist, is converting retail spaces, offices, and attics into owner-occupied homes. He also advocates for better opportunities for owner-occupied housing and detached homes in the outskirts of Copenhagen.

It’s unrealistic to create 50 percent owner-occupied homes in Copenhagen, says Curt Liliegreen. This is partly because there are already many other types of housing—including cooperative apartments. (Photo: © Mathias Svold, Ritzau Scanpix)

"We must also ensure that we don’t solve one problem by building more owner-occupied homes, only to overlook another issue: the lack of affordable housing."

"Owner-occupied homes will never be the most affordable option," he says about the housing challenges in the capital.

Troels Lund Poulsen, however, disagrees with the criticism. He argues that it’s not unrealistic to designate more areas for owner-occupied homes—even in Copenhagen, where he points to Ørestad, a district built in the 2000s.

"In Copenhagen, there was a huge debate about whether it would be feasible to establish so many homes. It turned out to be a massive success. We need to think differently about creating more owner-occupied housing," says Troels Lund Poulsen.

Mette Frederiksen (Social Democrats) already addressed housing challenges in her New Year’s speech. She stated that something was wrong when families with average incomes struggle to find an affordable apartment in Copenhagen, while people elsewhere in the country have difficulty borrowing for a detached home.

Lars Løkke Rasmussen (Liberal Party) earlier this month floated the idea of changing housing tax, shifting it to a tax on capital gains from home sales.

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